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Philippines: Aboitiz may bid on geothermal plants

Philippine's ABOITIZ Power Corp. (PS:AP) is targeting to bid on several other government-owned power plants while fast-tracking the completion of new projects.

Philippine’s ABOITIZ Power Corp. (PS:AP) is targeting to bid on several other government-owned power plants while fast-tracking the completion of new projects.

APS president Erramon Aboitiz said they are looking at bidding for the Tongonan and Palinpinon geothermal power plants in the Visayas, although most of their prospects are in Luzon.

“We want to serve the growth of the sector and augment the power supply in the country. We would also like to take advantage of the selling of government assets,” Aboitiz told reporters in a briefing. “There may be a slowdown, but we are planning for the long-term. For us, it’s business as usual.”

The company, together with its partner Evonik Steag GmbH, is also looking at expanding the 232-MW plant in Misamis Oriental but is putting off the project until they get a favorable rate. “Currently, the cost of power for a new plant is higher than the grid rate. It would be difficult for us to get contracts and you need contracts to start a plant,” Aboitiz said.

Aboitiz said the company still has remaining cash from its initial public offering in 2007 to fund the expansions. The company also completed the issuance of five-year and seven-year peso-denominated corporate fixed-rate notes worth P3.9 billion (US$ 83 million). The company is also set to raise up to P3 billion (US$ 64 million) from retail bonds later this year.

In another development, APC said the proceeds of the fixed rate notes are programmed to fund its 40-percent downpayment for the acquisition of the 289-MW Tiwi and the 458.53-MW MakBan geothermal power plants.

In its disclosure, APC said it filed with the Securities and Exchange Commission a preliminary registration statement to enlist the fixed-rate corporate bonds issuance. APC said it registered a total principal amount of up to P1.5 billion and an additional P1.5 billion to cover any oversubscription. APC earlier said it has yet to decide on whether it would maintain or downsize the issue amount.

“We really don’t need the other P3 billion (US$ 42 million, as proceeds from the retail bond offer), thus we may downsize it to only P2 billion,” said Aboitiz.